HP sees strong Q4 profit on price hikes, U.S. tariff refunds

• HP expects to benefit from refunds on tariffs previously collected before the U.S. Supreme Court struck down those duties
• Third-quarter adjusted profit reached 83 cents per share, helped by strong demand and price hikes implemented due to a global memory chip shortage
• HP joined peers Dell, Apple, and Lenovo in raising device prices to offset costs from memory chip supply constraints

HP Forecasts Strong Q4 Profit on Tariff Refunds and Premium PC Pricing

HP Inc. (HPQ.N) projected fourth-quarter adjusted earnings per share above Wall Street expectations on August 26, driven by anticipated U.S. tariff refunds and price increases on premium and AI-powered personal computers. These factors are expected to offset elevated memory chip costs.

Key Financial Performance:

• Q3 revenue reached $15.7 billion, up 12.5% year-over-year, surpassing analyst estimates of $14.38 billion
• Q3 adjusted profit of 83 cents per share exceeded expectations
• The company raised its full-year adjusted earnings per share forecast

Tariff Developments:

The Trump administration has refunded tariffs previously collected before the U.S. Supreme Court struck down certain duties, according to recent court filings. This development provides HP with additional financial relief.

Market Dynamics:

HP, along with competitors Dell Technologies, Apple, and Lenovo Group, implemented price increases on devices due to a global memory chip shortage that drove up production costs. The company noted that addressing environmental constraints improved memory supply and fulfillment rates.

Strong demand for premium and AI-enabled PCs contributed to the revenue beat. HP's management emphasized increased total sales and profitability during Q3.

Competitive Context:

Rival Dell also reported revenue growth in August, benefiting from the AI hardware boom and similar pricing strategies to address the memory chip shortage.

Market Implications:

HP's positive outlook signals resilience in the PC market, particularly in the premium and AI-powered segments, while tariff refunds provide additional tailwinds for profitability despite ongoing supply chain cost pressures.